Global positioning system to manage risk for POS terminal

ABSTRACT

The present teachings describe a system for processing financial transactions. In one embodiment, the system includes a remote terminal adapted to identify the location of financial transactions via global positioning system (GPS) information such that the remote terminal acquires transaction information from a user and transmits a first signal indicative of transaction information and GPS information. In addition, the system includes an authorizing host adapted to receive the first signal transmitted by the remote terminal such that the authorizing host evaluates the risk associated with financial transactions based, at least in part, on the GPS information so as to determine whether to accept or decline the financial transaction. The present teachings further describe devices and methods of acquiring GPS information for the purpose of managing risk for financial transactions.

BACKGROUND OF THE INVENTION

1. Field of the Invention

The present invention relates to financial transactions and, inparticular, to a system and method of risk assessment, whereby globalpositioning system (GPS) information is acquired for validation offinancial transactions.

2. Description of the Related Art

A typical financial transaction involves a form of payment in exchangefor goods and services at a point of sale. In most instances, a customerprovides the form of payment, such as a check draft or credit cardrequisition, to a merchant in exchange for the goods and services. Thecheck draft and the credit request are often regarded as non-cashpromissory payments that instruct the customer's bank or creditguarantor to pay the merchant the amount requested by the customer. Insome situations, the funds promised to the merchant by the check draftor credit request may not be paid due to reasons such as insufficientfunds in the customer's checking account, account delinquency, or fraud.As a result, the merchant may be susceptible to risk when a check draftor credit card requisition is received as payment for goods andservices.

Some merchants choose to manage risk by subscribing to a paymentapproval agency that assesses the risk associated with profferedpromissory payments. For a given financial transaction, a subscribedmerchant sends a transaction approval request to the agency withinformation, such as the payment amount and the method of paymentidentifying information. The agency assesses the risk and generates arisk score based on the information received. The agency then eitherapproves or declines the transaction based on the generated risk score.The level of subscription to such an agency may vary, wherein the agencymay assume the risk of the transaction by either guaranteeing the checkor purchasing the check from the merchant. Thus, it is in the interestof the agency to accurately assess the risks associated with financialtransactions.

As is understood, the risk of a particular transaction is often basedupon the physical location at which the sale is taking place. In someareas, the likelihood that a proffered promissory payment will not bebacked by sufficient funds, or will be otherwise fraudulent, isincreased. Hence, risk assessment agencies typically want to know thephysical location of the store front that is requesting the riskassessment of the proffered payment as that physical location is animportant variable in determining risk score.

Generally, merchants are equipped with a store front transaction devicewhich is communicatively linked to the risk assessment agency. Thesetransaction devices have the ability to transmit information about theproffered promissory payment to the risk assessment agency as well asinformation that identifies the merchant. However, many of thesetransaction devices are portable and merchants may physically move theirstore location or the location of the transaction device. In thiscircumstance, the risk factors of accepting a proffered promissorypayment may have changed as a result in the change in location withoutthe risk assessment agency being aware of the change.

One particular circumstance where this problem occurs involvestravelling merchants. Many merchants travel from location to location tosell products. An example of such a merchant includes those who sellcrafts at state fairs and craft shows. The location of the salestransactions can vary quite widely within towns or states or evenbetween states. Some of these merchants may wish to accept profferedpromissory payments and may have a transaction device that they canconnect to the risk assessment agency via telephone, cellular telephoneor the like. In these circumstances, the risk of accepting checks orother proffered promissory payments can vary quite significantly basedon location and the risk assessment agency generally does not have theability to determine where the travelling merchant is located.

Based on the foregoing, there is a need for an improved method andsystem for assessing the risk of accepting a proffered promissorypayment To this end, there is a need for a system and method that iscapable of discerning the physical location at which the transaction isoccurring such that the risk assessment can take this factor intoaccount when determining the risk of accepting the proffered promissorypayment.

SUMMARY OF THE INVENTION

The aforementioned needs may be satisfied by a system for processingfinancial transactions comprising, in one embodiment, at least oneremote terminal that identifies the location of a financial transaction,wherein the remote terminal also acquires transaction information abouta proffered promissory payment and transmits a signal indicative of thetransaction information and the location information. In addition, thesystem comprises an authorizing host that receives the signaltransmitted by the remote terminal wherein the authorizing hostevaluates the risk associated with the financial transaction based, atleast in part, on the location information so as to determine whether toaccept or decline the financial transaction, and wherein the authorizinghost transmits a signal back to the remote terminal indicative ofacceptance or decline of the proffered promissory payment.

The aforementioned needs may also be satisfied by a system forprocessing financial transactions comprising, in one embodiment, atleast one remote terminal that identifies the location of a financialtransaction with a GPS signal, wherein the remote terminal also acquirestransaction information about a proffered payment and transmits a signalindicative of the transaction information and the location information.In addition, the system comprises an authorizing host that receives thesignal transmitted by the remote terminal wherein the authorizing hostevaluates the risk associated with the financial transaction based, atleast in part, on the location information so as to determine whether toaccept or decline the financial transaction, and wherein the authorizinghost transmits a signal back to the remote terminal indicative ofacceptance or decline of the proffered payment.

The aforementioned needs may also be satisfied by a method ofdetermining the risk of accepting a proffered promissory payment. In oneembodiment, the method comprises determining the location of a remotetransaction device adapted to send transaction information about theproffered promissory payment to an authorizing host and sending thetransaction information and the location information to the authorizinghost. In addition, the method comprises performing a risk assessment ofaccepting the proffered promissory payment based upon the transactioninformation and the location information and sending a signal back tothe remote transaction device indicative of whether the profferedpromissory payment is to be accepted or declined.

The aforementioned needs may also be satisfied by a method ofdetermining the risk of accepting a proffered payment. In oneembodiment, the method comprises determining the location of a remotetransaction device with a GPS signal, wherein the remote terminal isadapted to send transaction information about the proffered payment toan authorizing host and sending the transaction information and thelocation information to the authorizing host. In addition, the methodcomprises performing a risk assessment of accepting the profferedpayment based upon the transaction information and the locationinformation and sending a signal back to the remote transaction deviceindicative of whether the proffered payment is to be accepted ordeclined.

The aforementioned needs may also be satisfied by a system fordetermining the risk of accepting a proffered payment. In oneembodiment, the system comprises a means for determining the location ofat least one remote transaction device, wherein the at least one remotetransaction device is adapted to send transaction information about theproffered payment to an authorizing host. In addition, the systemcomprises a means for sending the transaction information and thelocation information to the authorizing host and a means for performinga risk assessment of accepting the proffered payment based upon thetransaction information and the location information. Moreover, thesystem comprises a means for sending a signal back to the at least oneremote transaction device indicative of whether the proffered payment isto be accepted or declined.

These and other objects and advantages of the present teachings willbecome apparent from the following description taken in conjunction withthe accompanying drawings.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 illustrates one embodiment of a system for processing financialtransactions.

FIG. 2 illustrates one embodiment of the transaction device.

FIG. 3 illustrates one embodiment of a transaction data package.

FIG. 4 illustrates one embodiment of the information database component.

FIG. 5 illustrates one embodiment of a risk analysis process.

FIG. 6A illustrates another embodiment of a risk analysis process.

FIG. 6B illustrates still another embodiment of a risk analysis process.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT

Reference will now be made to the drawings wherein like numerals referto like parts throughout. FIGS. 1-7 illustrate various aspects relatedto a system and method of risk assessment for financial transactions,whereby global positioning system (GPS) information is acquired forvalidation of financial transactions.

FIG. 1 illustrates one embodiment of a system 100 for processingfinancial transactions. As illustrated in FIG. 1, the system 100comprises one or more transaction devices 104, such as remote terminalsor point of sale (POS) devices, and at least one authorizing host 108,such as a payment approval or risk assessment agency. The one or moretransaction devices 104 and the authorizing host 108 communicate in amanner so as to process financial transactions and manage the risk orlevel thereof associated with each financial transaction.

In one embodiment, the transaction device 104 comprises a plurality offunctional components including a reader component 120, an inputcomponent 122, a location component, such as a global positioning system(GPS) component 124, a processor component 126, a transceiver component128, and an output component 130. Additionally, the transaction device104 is utilized by a merchant to accept promissory payments fromcustomers. In one aspect, the transaction device 104 comprises a remoteterminal or POS device, such as an Eclipse™ device that is described ingreater detail herein below and illustrated in FIG. 2. However, itshould be appreciated by those skilled in the art that the transactiondevice 104 may also include various types of payment devices including acash register, personal computer, etc. without departing from the scopeof the present teachings. Therefore, it should also be appreciated bythose skilled in the art that one or more of the components as describedherein may be integrated into the various types of payment deviceswithout departing from the scope of the present teachings.

The reader and input components 120, 122 may include a type of monetaryexchange device, such as a check reader, credit card reader, debit cardreader, keyboard for manual input of account information, or somecombination thereof for the purpose of acquiring transaction informationfrom customers at the point of sale. The reader and input components120, 122 of the transaction device 104 identifies, by either magneticink character recognition (MICR) or optical character recognition (OCR),the American Banking Association (ABA) account information printed onthe face of the check draft and converts the customer's ABA accountinformation to transaction information, which may include digitalsignals or digital signatures. The transaction information may then betransferred from the transaction device 104 to the authorizing host 108for processing. One example of a transaction device 104 is the Eclipse™device currently available from Telecheck Inc. of Houston, Tex.

The location component 124 acquires positional information, such ascoordinates, related to the location at which the financial transactionsare occurring. In this implementation, the location component comprisesa GPS component that receives signals from orbiting satellites in aknown fashion to determine location and can thus provide a very specificlocation, accurate to within several yards, of the location of thetransaction device 104. This location information can thus be providedto the authorizing host or risk assessment agency 108 and thisinformation can be used during the risk assessment of accepting theproffered payment in the manner that will be described hereinbelow.While the current description refers to the transaction device 104obtaining its location using the GPS system, it will be appreciated thatany of a number of other location determining systems can be usedwithout departing from the spirit of the present invention. For example,if the transaction device 104 is connected to the authorizing host 108via telephone, location information can be determined by the telephonenumber the transaction device 104 is using to dial the authorizing host.

In general, a GPS receiver or GPS component communicates with aplurality of earth-orbiting GPS satellites via radio frequency (RF)signals. The GPS receiver gathers information related to the distance toeach satellite and the distance between each satellite. The GPS gathersinformation by receiving and analyzing high-frequency, low-power radiosignals from the GPS satellites. For example, the GPS receivercalculates the distance to GPS satellites by timing the radio signalfrom the satellite to the GPS receiver. The length of the delay issubstantially equal to the travel time of the radio signal. The receivermultiplies this time by the speed of light to determine the distancethat the signal traveled from the satellite to the GPS receiver. The GPSreceiver then utilizes the GPS distance information to determine alocation on earth. This operation is based on a generally knownmathematical principle called trilateration.

According to one embodiment of the present teachings, various levels ofrisk for financial transactions can be associated to areas, locations,and regions where financial transactions take place. In general, somelocations may be determined to be of lower or higher risk. For example,a high risk evaluation may be determined for a location that has a poortransaction history, such as a high crime area or an area with a largenumber of fraudulent transactions. In another example, a low risk areamay have a good transaction history. In still another example, amoderate risk area may have a few returned checks, but the returnedchecks are paid with penalties. It should be appreciated that approvedregions for financial transactions may be pre-defined or pre-determinedprior to each financial transaction. In addition, various levels of riskfor these approved regions may be stored in a database and accessed foreach financial transaction. Moreover, various levels of risk can also beassociated to ZIP coded regions, wherein the GPS coordinates can becompared to approved ZIP code regions. Further scope and functionalityrelated to these concepts will be described in greater detailhereinbelow.

The transceiver component 128 of the transaction device 104 is adaptedto transmit data and information including a transaction data packagefrom the transaction device 104 to the authorizing host 108. Thetransceiver component 128 is also adapted to receive data andinformation including approval and/or decline data from the authorizinghost 108. The output component 130 may include a display monitor, aprinter, or various other output peripherals generally known in the art.The display monitor may comprise a video monitor, a liquid crystaldisplay (LCD), or any other relevant type of display.

The processor component 126 of the transaction device 104 coordinatesthe functions of the transaction device 104. The processor component 126communicates with the reader and input components 120, 122 so as toreceive transaction information therefrom. The processor component 126communicates with the location component 124 so as to receive thelocation information therefrom. The processor component 126 combines orpackages the transaction information and the location information into arecognizable transaction data package. The processor component 126communicates with the transceiver component 128 so as to coordinate thetransmission of the transaction data package to the authorizing host 108and also to receive validation information from the authorizing host108. The processor component 126 communicates with the display componentto inform the user of the current status of financial transactions.

In one embodiment, the authorizing host 108 comprises a plurality offunctional components including a transceiver component 148, ainformation database component 150, a risk evaluation component 152, andone or more risk database components 154. These components may either bepart of a single integrated system or may be comprised of a distributedsystem. The authorizing host 108 is adapted to determine and evaluatethe risk for financial transactions based, at least in part, on the GPSinformation received from the transaction device 104. For example, therisk evaluation component 152 evaluates information, such as the checkamount, the ID of the check writer, the merchant, the type ofmerchandize being purchased as well as the location information providedby the transaction device 104 to determine a risk score of accepting thecheck or other proffered payment. The risk score is, of course,indicative of whether the proffered payment will be backed by suitablefunds in the individual's account when the merchant submits the check,either electronically or physically, to the individual's bank. Oneexample of an authorizing host is the risk assessment agency run byTelecheck, Inc. of Houston, Tex.

The authorizing host 108 interacts with the one or more transactiondevices 104 via the transceiver components 128, 148, such as atelephonic, satellite, and/or computer network (internet) interface andperforms this risk analysis for a plurality of merchants on a pluralityof different transactions. The authorizing host 108 further returns anapproval or decline decision to the transaction device 104 via thetransceiver components 128, 148 and displays the applicable results onthe display component of the transaction device 104.

In one embodiment, the transceiver component 148 of the authorizing host108 receives data and information including the transaction data packagefrom each transceiver component 128 of each transaction device 104. Thetransceiver component 148 may also be adapted to transmit data andinformation including approval and/or decline data from the authorizinghost 108 to the transaction device 104. It should be appreciated thatthe transceiver component 148 for the authorizing host 108 may havesimilar scope and functionality as the transceiver component 128 for thetransaction device 104. In general, the transceiver components 128, 148are adapted to communicate so as to transfer transaction information foreach financial transaction between the authorizing host 108 and thetransaction device 104.

In one embodiment, the information database component 150 of theauthorizing host 108 comprises a plurality of merchant parameters thatidentify approved locations for financial transactions that correspondto the location information, such as coordinates. When financialtransactions are submitted by the transaction device 104, theauthorizing host 108 retrieves information related to the currentmerchant from the information database component 150 and determines ifthe current merchant is authorized to process financial transactions inthe submitted locations. If the submitted location information isacceptable, then the merchant is authorized to continue processing thefinancial transaction. If the location information is not acceptable,then the authorizing host 108 may either decline the financialtransaction or request additional information from the merchant so as todetermine if the level of risk for the financial transaction is within arange of acceptance. Further scope and functionality related to riskanalysis by the authorizing host 108 will be described in greater detailhereinbelow.

In another embodiment, the information database component 150 compriseslocation information which is defined as GPS coordinates andcorresponding zip code information that can be used by the riskevaluation component 152 to correlate GPS coordinates to thecorresponding zip code information. In general, GPS coordinates candefine areas, locations, and positions within boundaries of known zipcode regions. A risk value or level of risk for financial transactionsin certain zip code regions can be pre-determined and stored in theinformation database component 150. Thus, when GPS information isreceived for financial transactions, the location of a particularfinancial transaction can be matched to a corresponding zip code regionso as to determine a risk value or level of risk.

In addition to the location information, the risk evaluation component152 may also access and retrieve relevant transaction information aboutcustomers, such as check writing history, and the merchants, such as apre-determined limit on an acceptable check draft amount or creditrequisition and other specific factors preferences, from one or morerisk database components 154. The risk databases allow the riskevaluation component 152 to gather relevant transaction informationabout customers and merchants that may not necessarily be available inthe information database component 150 so as to further facilitate therisk assessment. The risk evaluation component 152 utilizes the relevantinformation to evaluate financial transactions so as to adapt the mannerin which the risk assessment is performed by the authorizing host 108.

The risk evaluation component 152 may further function as a risk scoringengine that evaluates financial transactions in a known manner based onthe received transaction information including the location informationand the risk information from the risk database components 154. The riskscoring engine function may determine a risk score indicative of aprobable risk assessment of each financial transaction. Advantageously,the risk scoring engine function may comprise a plurality of riskscoring engines, wherein each risk scoring engine is adapted to addressa plurality of possible financial transactions or transaction variablesin a manner so as to improve accuracy in determining the risk score.

For example, the risk evaluation component 152 may access theinformation database component 150 for transaction information about thelocation of the financial transaction and ascertains whether thefinancial transaction is occurring in a high risk region. In thisexample, high risk financial transactions arise from unfavorablefinancial transaction histories in particular locations. As a result,the risk evaluation component 152 may then decide that the financialtransaction is of high risk and, in which case, subsequently declinesauthorization due to an unacceptable risk score ascertained for thefinancial transaction.

FIG. 2 illustrates one embodiment of the transaction device 104. Asillustrated in FIG. 2, the transaction device 104 may comprise anEclipse™ terminal 170 manufactured by Telecheck, Inc. of Houston, Tex.Advantageously, in one aspect of the present teachings, the Eclipse™terminal 170 can be adapted so as to integrate the location component124, such as a GPS receiver, therein so that GPS information can begathered and sent to the authorizing host 108 for each financialtransaction. It should be appreciated by those skilled in the art thatthe remote terminal or POS device may also include various forms ofpayment devices including a cash register, personal computer, etc.without departing from the scope of the present teachings. Therefore, itshould also be appreciated by those skilled in the art that the GPScomponent as described herein may be integrated into various types ofpayment devices without departing from the scope of the presentteachings.

In one embodiment, the Eclipse™ terminal 170 comprises a POS paymentterminal that is adapted to accept various non-cash payment typesincluding checks, credit cards, debit cards, and electronic benefittransfer (EBT) transactions. In addition, the Eclipse™ terminal 170 alsoenables the TeleCheck Electronic Check Acceptance® (ECA®) service andmany other TeleCheck services. Advantageously, TeleCheck and theEclipse™ terminal combine the benefits of accurate databases withadvanced authorization and payment technology.

In one embodiment, the Eclipse™ terminal 170 comprises a built-in inkjet receipt printer 172 that reduces counter space, voids ECAtransactions, and endorses paper checks to include subscriber number andapproval code. Additionally, the Eclipse™ terminal 170 comprises abacklit touch-screen display 174 that provides a user friendly interfaceand exceptional visibility.

Moreover, the Eclipse™ terminal 170 rapidly authorizes financialtransactions so as to speed up checkout. In one embodiment, the Eclipse™terminal 170 comprises a check reader 176 that enables the conversion ofpaper checks to electronic items. In addition, the Eclipse™ terminal 170comprises a dual-track magnetic strip reader 178 that automaticallycollects and inputs data from credit cards and driver's licenses.

Furthermore, the Eclipse™ terminal 170 comprises a full reportingcapability that provides easy access to transaction and paymentinformation including sales amounts and various other details for eachpayment type. In one embodiment, the Eclipse™ terminal 170 stores up to500 check and 300 card transactions. In addition, the Eclipse™ terminal170 comprises check imaging capability that allows merchants to processmost checks without identification. Also, the Eclipse™ terminal 170comprises a user friendly keyboard 180, such as a numeric oralphanumeric keyboard. It should be appreciated by those skilled in theart that the transaction device 104 may comprise various other generallyknown POS devices without departing from the scope of the presentteachings.

FIG. 3 illustrates one example of a transaction data package 200 that istransmitted from the transaction device 104 to the authorizing host 108.The transaction data package 200 of FIG. 3 is simply exemplary of theinformation that is provided to the authorizing host 108 when afinancial transaction is being sent to the authorizing host 108 for riskassessment and the format of the packet can be any of a number ofdifferent formats known in the art. As illustrated in FIG. 3, thetransaction data package 200 comprises transaction information 202 andlocation information 204, such as GPS information. In one aspect, thetransaction information 202 may include one or more data componentsincluding store information, merchant information, clerk identificationnumber, customer information, transaction number, transaction date,transaction dollar amount, and payment information, such as credit,check, and/or cash information. In addition, the transaction information202 may further include a subscriber information code (SIC) thatidentifies the merchant and/or transaction device 104. Advantageously,the authorizing host 108 can utilize the SIC component of thetransaction information 202 to retrieve merchant parameters from theinformation database 150 for subsequent risk assessment of the financialtransaction by the risk evaluation component 152. Moreover, the locationinformation 204 includes transaction location information, such as GPSpositional coordinates of each financial transaction. Advantageously,the risk evaluation component 152 can utilize the retrieved merchantparameters together with the received GPS information 204 to determinethe risk or level thereof for each financial transaction.

Hence, the transaction device 104 transmits a data package thatidentifies the merchant, the customer, the amount of the profferedpayment and the location of the transaction device when the profferedpayment is made. This information allows the authorizing host 108, e.g.,the risk assessment component, to receive sufficient information toassess the risk of accepting the proffered payment.

FIG. 4 illustrates one embodiment of the information database component150. As illustrated in FIG. 4, the information database component 150comprises stored information and/or data related to the subscriberinformation code (SIC), approved transaction types, approved transactionareas, and risk engine evaluation items. The SIC component identifiesthe merchant and at least one transaction device 104 usable by themerchant for financial transactions in approved locations. The approvedtransaction types may include cash, check, debit, credit, and EBTtransactions. Also, the approved transaction types may be restricted fora particular merchant and/or transaction location. Alternatively, therisk scoring protocols for different types of transactions can bedifferent for different merchants. For example, accepting a particulartype of proffered payment by one merchant in one location may require adifferent risk assessment than accepting other types of payments. Hence,the transaction types may also provide indications of risk protocols foreach transaction type for different merchants.

In one embodiment, the information database component 150 may beconfigured with stationary merchant parameters 220 such that financialtransactions are restricted to proximate locations within a specifiedarea, such as a commercial building. In general, a stationary merchantmay be defined as a merchant that does business from a single location,such as a grocery store, hardware store, auto repair, etc. Alternately,in another embodiment, the information database component 150 may beconfigured with traveling merchant parameters 230 such that financialtransactions are defined for a plurality of distal locations approved bythe authorizing host 108.

For example, the present teachings may be useful for various embodimentsof stationary merchants, stationary merchants that change physicallocation and/or the nature of the business, traveling merchants, andtraveling merchants that change physical location and/or the nature ofthe business. In one aspect, managing risk for traveling merchantsincludes seasonal merchants and merchants that travel while conductingbusiness. It should be appreciated by those skilled in the art that achange in location of the remote terminal or POS device may signify thatthe risk of financial transactions have changed, but alternately for thepermanent or stationary merchants or vendors, such as hardware stores,pawn shops, etc., a change in location may signify that the nature ofthe business, such as goods and service provided, have changed. Thus, achange in location for stationary and/or traveling merchants may requirethat the authorizing host, such as TeleCheck, may proceed to stopprocessing financial transactions for the merchant until the change oflocation has been approved, researched, and/or verified, which mayinclude validating new addresses and/or approving a new contract for themerchants.

Additionally, it should be appreciated that the information databasecomponent 150 configured for traveling merchants may comprise the scopeand functionality of the stationary merchant configured informationdatabase component 150 with the added benefit of portability between aplurality of distal locations. In one aspect, the plurality of distallocations may be pre-approved by the authorizing host 108 for thetraveling merchant. In other words, the known locations at which themerchant will sell their products may be previously provided to theauthorization host 108. Hence, when the transaction device 104 providessignals indicating that the merchant has traveled from one location toanother, the authorizing host can update their risk scoring protocols toreflect the new location. The travel can, of course, be between citiesor states or even countries.

Additionally, the information database component 150 can also storeapproved areas and/or locations for particular merchants. For astationary merchant, such as an owner of a commercial building or store,the approved area is the localized proximity of the store, which can beidentifiable with a designated GPS coordinate or proximate range of GPScoordinates. For example, if the transaction device 104 was moved out ofan approved proximity to the commercial building, then financialtransactions may be assessed with updated risk protocols or may even bedeclined. Therefore, the transaction device 104 can be substantiallyrestricted to process financial transactions in the approved proximitydepending on the needs of the merchant. Advantageously, fraud can bereduced due to the requirement of location information, e.g., GPScoordinate matching, of the financial transactions between thetransaction device 104 and the authorizing host 108.

In another example, the default or approved transaction area for themerchant may be defined by a particular zip code. If the locationinformation provided by the transaction device 104 does not fall withinthe correct zip code, then either the transaction can be denied or therisk protocols can be updated to accommodate the new location. Tofacilitate, this implementation, the authorizing host 108 may include azip code map where GPS coordinates are mapped by zip codes.

FIG. 5 illustrates one exemplary embodiment of a risk analysis process500 performed by the risk evaluation component 152 of the authorizinghost 108. As illustrated in FIG. 5, the process 500 initiates in a startstate 502 and proceeds to state 504, wherein the authorizing host 108receives the data package 200 from the transaction device 104. Asdiscussed above, the data package 200 includes identifying informationabout the transaction such as the customer, the type of profferedpayment, the purchase amount, etc. and identifying information about themerchant such as the SIC code for the merchant, as well as the locationinformation, e.g., the GPS coordinates, of the transaction device 104.

Next, in state 506, the risk evaluation component 152 extracts thetransaction information and the location information, e.g., the GPScoordinates, from the data package and identifies the location of thefinancial transaction from the location information. The risk evaluationcomponent 152 then identifies, in state 508, the merchant from thetransaction information and retrieves a location parameter, such asapproved locations, from the information database component 150.

In state 510, the risk evaluation component 152 determines whether thelocation of the financial transaction is an approved location based onthe retrieved GPS parameter. If the transaction location is a locationthat has been previously approved for the merchant, then the riskevaluation component 152 proceeds with standard risk processing in state512.

Otherwise, if the location is not within the boundaries specified by theretrieved location parameter, then the risk evaluation component 152evaluates the present GPS coordinates in state 514 to update the riskscoring model. As discussed above, the risk of accepting profferedpayments may vary depending upon the geographical location of thetransaction. The risk evaluation component 152 can have access to datathat can be used to update a risk scoring model with the new location.In some circumstances, the location may be such that the risk will be sohigh for a particular transaction that the proffered payment may bedeclined.

Once the risk parameters have been updated to accommodate the newlocation, the risk evaluation component 152 can perform risk processing,in state 516, with the updated parameters and the current GPScoordinates. The process terminates in an end state 520.

In this way, the change in location of the transaction device 104 can beimmediately provided to the authorizing host 108 and the authorizinghost 108 can update its risk assessment of accepting a proffered paymentbased on the new location. The transmission of GPS coordinates providesa simple method of providing location information that can be comparedto either pre-approved locations for this particular merchant or can beused to update risk assessment parameters based upon known risk factorsfor the new location.

FIG. 6A illustrates another embodiment of a risk analysis process 600 aperformed by the risk evaluation component 152 of the authorizing host108. As illustrated in FIG. 6A, the process 600 a initiates in a startstate 602 and proceeds to a decision state 604, wherein the authorizinghost 108 evaluates the GPS information extracted from the data package.In addition, the risk evaluation component 152 determines whether theGPS information is associated with an approved ZIP code value or withinan approved ZIP code range for the merchant. In general, the GPSinformation can be associated to one or more ZIP code regions forpurposes of risk assessment by the risk evaluation component 152.

Next, if the GPS information is approved, then the process 600 aadvances to state 606, wherein the financial transaction is processedassuming the same SIC risk as retrieved from the information databasecomponent 150. Otherwise, in state 608, if the GPS information is notapproved, then the risk evaluation component 152 determines a new ZIPcode, in state 612, from the GPS information and calculates a new SICrisk based, at least in part, on the new ZIP code. Following, in state614, the risk evaluation component 152 processes the financialtransaction with the updated SIC risk. The process terminates in an endstate 630.

FIG. 6B illustrates still another embodiment of a risk analysis process600 b performed by the risk evaluation component 152 of the authorizinghost 108. It should be appreciated that FIG. 6B is related to process600 a of FIG. 6A with the added states 610, 616, 618, 620. Asillustrated in FIG. 6B, following state 608, the process 600 b advancesto a decision state 610, wherein the risk evaluation component 152determines if a known SIC risk is available for the current GPS locationof the financial transaction.

In one aspect, the risk evaluation component 152 attempts to retrievemerchant parameters from the information database component 150 relatedto known SIC risk information for the current merchant. If there is aknown SIC risk for the current GPS location, then the process 600 badvances to state 612, and the process 600 b proceeds as previouslydescribed in FIG. 6A. Otherwise, if the SIC risk for the current GPSlocation is unavailable, then the process 600 b advances to state 616,wherein the risk evaluation component 152 requests additionalinformation from the merchant.

For example, the risk evaluation component 152 may verify merchantidentification, location, and various other transaction information.Next, in a decision state 618, if the risk evaluation component 152determines that the new or verified SIC risk information is acceptable,then the process advances to state 612, and the process 600 b proceedsas previously described in FIG. 6A. However, if the new or verified SICrisk information is not acceptable, then the process advances to state620, wherein the risk evaluation component 152 informs the merchant notto proceed with processing the financial transaction. In other words,the authorizing host 108 declines the financial transaction and informsthe merchant via the transaction device 104. The process 600 bterminates in state 630.

Advantageously, GPS information and/or coordinates can be used by theauthorizing host 108 to mitigate the risk or level thereof associatedwith the use of wireless transaction devices. In one aspect, theauthorizing host 108 can receive GPS coordinates from one or moretransaction devices 104 having a range of valid GPS coordinates for eachmerchant controlled transaction device 104. Sometimes, if the receivedGPS coordinates from each transaction device 104 fail to match thestored merchant parameters of approved GPS coordinates or fall within arange of approved GPS coordinates for the merchant, then the financialtransaction can be treated differently. Beneficially, this allows amerchant to process financial transactions in a plurality of approvedlocations with the same transaction device 104. As a result, eachtransaction device 104 may be adapted to comprise a greater approvalregion depending on the requirements or needs of the merchant.

Moreover, the authorizing host 108 can utilize the SIC component of thetransaction information 202 to retrieve merchant parameters forsubsequent risk assessment of the financial transaction. Advantageously,the authorizing host 108 can further utilize the retrieved merchantparameters together with the received GPS information 204 to determinethe risk or level thereof for each financial transaction. As a result,fraud can be reduced due to the requirement of GPS coordinate matchingof the financial transactions between the transaction device 104 and theauthorizing host 108.

Although the following description exemplifies one embodiment of thepresent teachings, it should be understood that various omissions,substitutions, and changes in the form of the detail of the apparatus,system, and/or method as illustrated as well as the uses thereof, may bemade by those skilled in the art, without departing from the spirit ofthe present teachings. Consequently, the scope of the present teachingsshould not be limited to the disclosed embodiments, but should bedefined by the appended claims.

1. A system for processing financial transactions comprising: at leastone remote terminal assigned to a traveling merchant, wherein a changein location associated with the traveling merchant effects a change inlocation of the at least one remote terminal, wherein the at least oneremote terminal identifies a distal GPS (Global Positioning System)location of a financial transaction, wherein the at least one remoteterminal also acquires transaction information about a profferedpromissory payment and transmits a signal indicative of the transactioninformation and the distal GPS location information; and an authorizinghost that receives the signal transmitted by the at least one remoteterminal wherein the authorizing host evaluates the risk associated withthe financial transaction based, at least in part, on comparing thedistal GPS location information to a plurality of pre-approved locationsthe traveling merchant travels to in order to conduct transactions,wherein the authorizing host adjusts the risk evaluation based upon thedistal GPS location information, so as to determine whether to accept ordecline the financial transaction, wherein the authorizing hosttransmits a signal back to the at least one remote terminal indicativeof acceptance or decline of the proffered promissory payment, and whenthe at least one remote terminal declines the financial transaction, theauthorizing host is configured to evaluate additional merchantparameters associated with the financial transaction that are differentthan the distal GPS location information.
 2. The system of claim 1,wherein the at least one remote terminal includes a Global PositioningSystem (GPS) receiver that receives GPS signals and determines thelocation coordinates of the at least one remote terminal based upon theGPS signal.
 3. The system of claim 2, wherein the authorizing hostincludes a risk assessment component that evaluates the risk associatedwith the financial transaction, wherein the risk assessment componentadjusts the risk assessment based upon the location information receivedfrom the at least one remote terminal.
 4. The system of claim 3, whereinthe risk assessment component categorizes an approved location for theat least one remote terminal, wherein the risk assessment componentperforms a standard risk assessment when the location informationindicates that the at least one remote terminal is at the approvedlocation.
 5. The system of claim 4, wherein the risk assessmentcomponent adjusts the risk assessment when the location informationindicates that the at least one remote terminal is not in the approvedlocation by evaluating risk factors associated with the new location. 6.The system of claim 5, wherein the risk factors for the new locationinclude payment history on other proffered promissory payments in thesame location.
 7. The system of claim 3, wherein the authorization hostcategorizes a plurality of approved locations for the at least oneremote terminal wherein the merchant can move the at least one remoteterminal from one location to another.
 8. The system of claim 7, whereinthe risk assessment component declines transactions when the locationinformation provided by the at least one remote terminal indicates theat least one remote terminal is not in one of the plurality of approvedlocations.
 9. The system of claim 7, wherein the plurality of approvedlocations are defined as a region in which the GPS coordinates providedby the at least one remote terminal must fall within.
 10. The system ofclaim 9, wherein the authorization host has a data structure associatedtherewith that maps zip codes to GPS coordinates wherein theauthorization host can determine if a GPS coordinate falls within aparticular zip code wherein the approved location for the at least oneremote terminal is defined in terms of approved zip codes.
 11. Thesystem of claim 1, wherein the at least one remote terminal comprises aplurality of remote terminals.
 12. The system of claim 1, wherein thesignal comprises a data package having transaction information selectedfrom the group consisting of store number, identification number, clerknumber, transaction number, date, dollar amount, check information, cashinformation, and GPS information.
 13. A system for processing financialtransactions comprising: at least one remote terminal assigned to atraveling merchant, wherein a change in location associated with thetraveling merchant effects a change in location of the at least oneremote terminal, wherein the at least one remote terminal identifies adistal GPS (Global Positioning System) location of a financialtransaction with a GPS signal, wherein the at least one remote terminalalso acquires transaction information about a proffered payment andtransmits a signal indicative of the transaction information and thedistal GPS location information; and an authorizing host that receivesthe signal transmitted by the at least one remote terminal wherein theauthorizing host evaluates the risk associated with the financialtransaction based, at least in part, on comparing the distal GPSlocation information to a plurality of locations the traveling merchanttravels to in order to conduct transactions, wherein the authorizinghost adjusts the risk evaluation based upon the distal GPS locationinformation, so as to determine whether to accept or decline thefinancial transaction, wherein the authorizing host transmits a signalback to the remote terminal indicative of acceptance or decline of theproffered payment, and when the at least one remote terminal declinesthe financial transaction, the authorizing host is configured toevaluate non-location based risk factors associated with the financialtransaction.
 14. The system of claim 13, wherein the proffered paymentincludes a proffered promissory payment.
 15. The system of claim 14,wherein the proffered promissory payment includes a payment by check.16. The system of claim 13, wherein the at least one remote terminalincludes a GPS receiver that receives the GPS signal and determines thelocation coordinates of the at least one remote terminal based upon theGPS signal.
 17. The system of claim 16, wherein the authorizing hostincludes a risk assessment component that evaluates the risk associatedwith the financial transaction, wherein the risk assessment componentadjusts the risk assessment based upon the location information receivedfrom the at least one remote terminal.
 18. The system of claim 17,wherein the risk assessment component categorizes an approved locationfor the at least one remote terminal, wherein the risk assessmentcomponent performs a standard risk assessment when the locationinformation indicates that the at least one remote terminal is at theapproved location.
 19. The system of claim 18, wherein the riskassessment component adjusts the risk assessment when the locationinformation indicates that the at least one remote terminal is not inthe approved location by evaluating risk factors associated with the newlocation.
 20. The system of claim 19, wherein the risk factors for thenew location include payment history on other proffered payments in thesame location.
 21. The system of claim 17, wherein the authorizationhost categorizes a plurality of approved locations for the at least oneremote terminal wherein the merchant can move the at least one remoteterminal from one location to another.
 22. The system of claim 21,wherein the risk assessment component declines transactions when thelocation information provided by the at least one remote terminalindicates that the at least one remote terminal is not in one of theplurality of approved locations.
 23. The system of claim 22, wherein theplurality of approved locations are defined as a region in which the GPScoordinates provided by the at least one remote terminal must fallwithin.
 24. The system of claim 23, wherein the authorization host has adata structure associated therewith that maps zip codes to GPScoordinates wherein the authorization host can determine if a GPScoordinate falls within a particular zip code wherein the approvedlocation for the at least one remote terminal is defined in terms ofapproved zip codes.
 25. The system of claim 13, wherein the at least oneremote terminal comprises a plurality of remote terminals.
 26. Thesystem of claim 13, wherein the signal comprises a data package havingtransaction information selected from the group consisting of storenumber, identification number, clerk number, transaction number, date,dollar amount, check information, cash information, and GPS information.27. A method of determining the risk of accepting a proffered promissorypayment, the method comprising: assigning a remote transaction device toa traveling merchant, wherein a change in location associated with thetraveling merchant effects a change in location of the remotetransaction device; determining a distal GPS (Global Positioning System)location of the remote transaction device to send transactioninformation about the proffered promissory payment to an authorizinghost; sending the transaction information and the distal locationinformation to the authorizing host; performing a risk assessment ofaccepting the proffered promissory payment based upon the transactioninformation and the distal GPS location information, wherein the riskassessment is adjusted when the location of the remote transactiondevice is not within at least one of a plurality of authorized locationsthe traveling merchant travels to in order to conduct transactions; andsending a signal back to the remote transaction device indicative ofwhether the proffered promissory payment is to be accepted or declined.28. The method of claim 27, wherein determining the location of theremote transaction device comprises receiving GPS signals anddetermining a GPS based location of the remote transaction device. 29.The method of claim 27, wherein performing a risk assessment ofaccepting the proffered promissory payment comprises determining whetherthe GPS based location is in at least one pre-approved location for theremote transaction device.
 30. The method of claim 29, whereindetermining whether the GPS based location is in the at least onepre-approved location comprises determining whether the GPS basedlocation is within a region defined by a pre-approved zip code for theremote transaction device.
 31. The method of claim 29, whereinperforming the risk assessment further comprises determining a riskscore of accepting the proffered promissory payment based upon the GPSinformation, the information about the merchant, the amount of theproffered promissory payment, and the type of transaction to determinethe risk score.
 32. The method of claim 31, wherein the risk score isadjusted based upon whether the GPS information is within a pre-approvedlocation for the remote transaction device.
 33. The method of claim 29,wherein performing the risk assessment of accepting the profferedpromissory payment comprises determining whether the GPS based locationis in the at least one pre-approved location and comprises determiningwhich of a plurality of pre-approved locations the GPS location fallswithin.
 34. The method of claim 33, wherein a risk score is calculatedfor the proffered promissory payment based upon risk factors associatedwith the pre-approved location if it is determined that the GPS locationfalls within the pre-approved location.
 35. The method of claim 33,wherein a risk score is calculated for the proffered promissory paymentbased upon new risk factors associated with the GPS location when theGPS location does not fall within a pre-approved location.
 36. A methodof determining the risk of accepting a proffered payment, the methodcomprising: assigning a remote transaction device to a travelingmerchant, wherein a change in location associated with the travelingmerchant effects a change in location of the remote transaction device;determining a distal GPS (Global Positioning System) location of theremote transaction device with a GPS signal, wherein the remotetransaction device sends transaction information about the profferedpayment to an authorizing host; sending the transaction information andthe distal GPS location information to the authorizing host; performinga risk assessment of accepting the proffered payment based upon thetransaction information and the distal GPS location information, whereinthe risk assessment is adjusted when the location of the remotetransaction device is not within at least one of a plurality ofauthorized locations the traveling merchant travels to in order toconduct transactions; and sending a signal back to the remotetransaction device indicative of whether the proffered payment is to beaccepted or declined.
 37. The method of claim 36, wherein determiningthe location of the remote transaction device comprises receiving theGPS signal and determining a GPS based location of the remotetransaction device.
 38. The method of claim 36, wherein performing arisk assessment of accepting the proffered payment comprises determiningwhether the GPS based location is in at least one pre-approved locationfor the remote transaction device.
 39. The method of claim 38, whereindetermining whether the GPS based location is in the at least onepre-approved location comprises determining whether the GPS basedlocation is within a region defined by a pre-approved zip code for theremote transaction device.
 40. The method of claim 38, whereinperforming the risk assessment further comprises determining a riskscore of accepting the proffered payment based upon the GPS information,the information about the merchant, the amount of the proffered payment,and the type of transaction to determine the risk score.
 41. The methodof claim 40, wherein the risk score is adjusted based upon whether theGPS information is within a pre-approved location for the remotetransaction device.
 42. The method of claim 38, wherein performing therisk assessment of accepting the proffered payment comprises determiningwhether the GPS based location is in the at least one pre-approvedlocation and comprises determining which of a plurality of pre-approvedlocations the GPS location falls within.
 43. The method of claim 42,wherein a risk score is calculated for the proffered payment based uponrisk factors associated with the pre-approved location if it isdetermined that the GPS location falls within the pre-approved location.44. The method of claim 42, wherein a risk score is calculated for theproffered payment based upon new risk factors associated with the GPSlocation when the GPS location does not fall within a pre-approvedlocation.
 45. The method of claim 36, wherein determining the risk ofaccepting a proffered payment includes determining the risk of acceptinga proffered promissory payment.
 46. The method of claim 45, whereindetermining the risk of accepting a proffered promissory paymentincludes determining the risk of accepting a payment by check.
 47. Asystem for determining the risk of accepting a proffered payment, thesystem comprising: a means for determining a distal GPS (GlobalPositioning System) location of at least one remote transaction deviceassigned to a traveling merchant, wherein a change in locationassociated with the traveling merchant effects a change in location ofthe at least one remote transaction device, wherein the at least oneremote transaction device sends transaction information about theproffered payment to an authorizing host; a means for sending thetransaction information and the distal GPS location information to theauthorizing host; a means for performing a risk assessment of acceptingthe proffered payment based upon the transaction information and thedistal GPS location information, wherein the risk assessment is adjustedwhen the location of the remote transaction device is not within atleast one of a plurality of authorized locations the traveling merchanttravels to in order to conduct transactions; and a means for sending asignal back to the at least one remote transaction device indicative ofwhether the proffered payment is to be accepted or declined.
 48. Thesystem of claim 47, wherein the means for determining the location ofthe at least one remote transaction device includes a GPS receiver thatreceives GPS signals and determines the location coordinates of the atleast one remote transaction device based upon the GPS signal.
 49. Thesystem of claim 48, wherein the means for performing a risk assessmentincludes a risk assessment component that evaluates the risk associatedwith the financial transaction, wherein the risk assessment componentadjusts the risk assessment based upon the location information receivedfrom the at least one remote transaction device.
 50. The system of claim49, wherein the risk assessment component categorizes an approvedlocation for the at least one remote transaction device, wherein therisk assessment component performs a standard risk assessment when thelocation information indicates that the at least one remote transactiondevice is at the approved location.
 51. The system of claim 50, whereinthe risk assessment component adjusts the risk assessment when thelocation information indicates that the at least one remote transactiondevice is not in the approved location by evaluating risk factorsassociated with the new location.
 52. The system of claim 51, whereinthe risk factors for the new location include payment history on otherproffered payments in the same location.
 53. The system of claim 49,wherein the means for performing a risk assessment categorizes aplurality of approved locations for the at least one remote transactiondevice wherein a merchant can move the at least one remote transactiondevice from one location to another.
 54. The system of claim 53, whereinthe risk assessment component declines transactions when the locationinformation provided by the at least one remote transaction deviceindicates the at least one remote transaction device is not in one ofthe plurality of approved locations.
 55. The system of claim 53, whereinthe plurality of approved locations are defined as a region in which theGPS coordinates provided by the at least one remote transaction devicemust fall within.
 56. The system of claim 55, wherein the means forperforming a risk assessment has a data structure associated therewiththat maps zip codes to GPS coordinates wherein the authorization hostcan determine if a GPS coordinate falls within a particular zip code andwherein the approved location for the at least one remote transactiondevice is defined in terms of approved zip codes.
 57. The system ofclaim 47, wherein the remote transaction device comprises a plurality ofremote transaction devices.
 58. The system of claim 47, wherein thetransaction information is selected from the group consisting of storenumber, identification number, clerk number, transaction number, date,dollar amount, check information, cash information, and GPS information.